Question
Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's activities for 2017 (in millions). Net
Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's activities for 2017 (in millions).
Net monetary assets (liabilities), January 1, 2017 | 700 |
Acquisition of plant assets for debt, February 15, 2017 | 1,000 |
Purchase of inventory made evenly during 2017 | 3,500 |
Collection of receivables outstanding at January 1, 2017 | 2,700 |
Sales made evenly during 2017 | 6,000 |
Cost of goods sold | 3,300 |
Depreciation of assets acquired when the exchange rate was $1.80/ | 400 |
Current operating expenses (excluding depreciation and amortization), incurred evenly during 2017 | 1,200 |
Refinancing or "rollover" of commercial paper | 800 |
Exchange rates ($/) during 2017 are:
January 1, 2017 | $1.65 | Average for 2017 | $1.72 |
February 15, 2017 | 1.70 | December 31, 2017 | 1.76 |
(a) Assuming Asda's functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2017.
HINT: Not every fill-in box requires an answer. If an account is not used in the calculation, leave all corresponding fill-in answer boxes BLANK.
Enter all decimal places.
Use negative signs with answers that are reductions and to indicate a remeasurement loss.
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer | Answer | $Answer |
Acquisition of plant assets for debt | Answer | Answer | Answer |
Purchase of inventory | Answer | Answer | Answer |
Collection of receivables | Answer | Answer | Answer |
Sales | Answer | Answer | Answer |
Cost of goods sold | Answer | Answer | Answer |
Depreciation expense | Answer | Answer | Answer |
Refinancing of commercial paper | Answer | Answer | Answer |
Operating expenses | Answer | Answer | Answer |
Answer | |||
Exposed position, 12/31/17 | Answer | Answer | Answer |
Remeasurement gain (loss) | $Answer |
(b) Assuming Asda's functional currency is the pound, prepare a schedule to compute the translation gain or loss for 2017. Assume net assets on January 1, 2017, amounted to 1,200 million.
HINT: Not every fill-in box requires an answer. If an account is not used in the calculation, leave all corresponding fill-in answer boxes BLANK.
Enter all decimal places.
Use negative signs with answers that are reductions and to indicate a translation loss.
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer | Answer | $Answer |
Acquisition of plant assets for debt | Answer | Answer | Answer |
Purchase of inventory | Answer | Answer | Answer |
Collection of receivables | Answer | Answer | Answer |
Net income | Answer | Answer | Answer |
Refinancing of commercial paper | Answer | Answer | Answer |
Answer | |||
Exposed position, 12/31/17 | Answer | Answer | Answer |
Translation gain (loss) | $Answer |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started